iSolved – FSA/HSA

Health Savings Account (HSA)

AspenHR offers an HSA, which is a medical savings account that lets employees pay for out-of-pocket health care expenses with pre-tax dollars. Note: Employees are only eligible to participate in the HSA if they are enrolled in an HSA-qualified high-deductible health plan (HDHP).

An HSA is an individual account, fully owned by the account holder in the same manner as a personal bank account. Once funds are contributed, whether by the employee, employer or anyone else, the employee immediately becomes the owner of the funds in their account. Any interest or earnings on the HSA funds belong to the employee. There is no deadline to spend these funds.

An HSA offers employees a triple-tax advantage as well as a method to save for future health care expenses. Contributions, interest and investment earnings, and payments from their HSA (for qualified medical expenses) are all tax free.

Flexible Spending Accounts (FSAs)

An FSA is a pre-tax account used to pay for eligible out-of-pocket medical, dental, vision and hearing expenses not covered by the medical plan. We offer several types of FSA plans.

The Health Care Reimbursement Account is for out-of-pocket medical, dental, vision and hearing expenses incurred by the employee and their qualifying eligible dependents.*

The Dependent Care FSA can be used to pay employee expenses related to the cost of dependent care while the employee is at work or school. This includes care of a dependent child under the age of 13 (e.g., babysitters, nursery schools, pre-school and daycare) or care of household members who are physically or mentally incapable of caring for themselves and qualify as federal tax dependents.

The Limited-Purpose FSA only reimburses eligible dental and vision expenses. This plan is most frequently used when the employer offers a health savings account (HSA).

Note: For the 2024 plan year, all FSA accounts will have a grace period through March 15, with no rollover of funds into the next year.

*IRS regulations do not allow anyone to make or receive HSA contributions if they are enrolled in the health care FSA.

Commuter Spending Account

Employees can reduce their work-related transportation expenses when they enroll in a commuter spending account.

To enroll, employees should calculate how much money they need for work-related transit and/or parking each month. This amount can then be deducted from their paycheck pre-tax, and put into their commuter account. These pre-tax dollars can be used to pay for train tickets, bus passes, etc.

Note: This account defines a monthly maximum for eligible mass transit and parking expenses.

Non-discrimination Testing Rules

Non-discrimination testing rules were created by the IRS to prevent employers from discriminating in favor of individuals who are either highly compensated or otherwise key to the business. Testing shows whether or not the FSA plan is discriminating in favor of these employees. Aspen HR is required to test this FSA plan on an annual basis and if the plan is found to be discriminating, annual elections for the FSA may need to be changed or terminated. Aspen HR will send out a notification if this applies to your elections.

HSA 

FSA

Additional Resources

Questions? Contact Benefits@AspenHR.com